The 3 Pillars for creating wealth: Pillar 1, Pillar 2, Pillar 3
“My rich dad taught me to focus on passive income and spend time acquiring assets that provide passive or long-term residual income…passive income from capital gains, dividends, residual income business, rental income from real estate, and royalties.” – Robert T. Kiyosaki
If you want to create long-term wealth, passive income has to be one of your sources of income. Passive income is how the smart money earns their money.
The more passive income sources you can create for yourself the better off and more financially secure you will be. If one of your passive income sources were to suddenly go away, you would still have other income sources available to protect you.
What is passive income?
Passive income is defined as income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
Passive income will entail an initial investment in time, work, and require some regular maintenance, but once it gets going it can yield a continuous return whilst requiring very little real work to maintain it. You can essentially earn money while you are sleeping or enjoying a sunny day on the beach.
I won’t discuss real estate or stocks and bonds in this post as these typically require a greater upfront investment in money. In this post, want to focus on things that require very little startup capital. Sometimes you have more time than you have money.
Here are 10 passive income ideas that require very little startup capital.
#1 – Write an Ebook
If you have an interest in writing fiction, non-fiction, or my personal favorite How To Books, consider writing an ebook for sale and distribution on Amazon through Kindle Direct Publishing (KDP). You may not get rich by writing only one book, but the residual income earned will increase if you write several or more books.
The books you write do not have to be 300-page novels. Many books that sell for $0.99 are less than 50 pages. It won’t take you a year to write a 50-page book. However, before you discount the amount of the residual income that a $0.99 ebook can provide, consider this realistic example.
The commission paid by Amazon for a $0.99 ebook is $0.35. Therefore, you will earn $0.35 for every purchase.
Let’s say you wrote a book about great smoothie recipes. Everyone likes smoothies, right?
If you sold 5 books each day (this is totally achievable, the book is only a buck) your earnings would look like this.
1 Day = $1.75
1 Week = $12.25
1 Month (30 days) = $52.50
1 Year = $638.75
Ok, $638 does not sound like a lot of money. But, what if you had 50 ebooks where each one earned you $1.75 each day? You would make $31,937 ($1.75 x $638.75) of residual income each year.
#2 – Produce an Audiobook
Audiobooks are becoming more and more popular. Many people are starting to realize that you can still enjoy a good quality book even if you are pressed for time. People with a long commute to work can listen to the book while they are traveling.
Offering different formats of your book (ebook, paperback, audiobook), will allow you to reach more customers. The best way to create an audiobook is to convert your digital book into an audiobook. KDP makes the conversion process easy. All you need to do is signup to ACX, which is Amazon’s audiobook publishing center. Bear in mind, however, to publish on ACX, you need to be a US resident or business.
Just like with ebooks, an audiobook will provide a great passive income stream for years after you have done all the work.
#3 – Create a niche blog
One of the best passive income ideas you can utilize is to create a niche blog. By creating a niche blog and building out the content, you can effectively drive thousands of visitors each day to your blog.
Don’t get me wrong. Blogging isn’t easy. It will take a considerable amount of time to get a good niche blog up and running. I’m talking upward to 40 hours or more per week to build something of high quality that will get traffic.
Is a niche blog worth it? You bet. Niche blogs can command vast audiences, and thus open the opportunity to several passive income channels.
You can install ads on your niche blog, which can also become very profitable if your blog receives many engaged visitors. However, don’t count on making a considerable amount of money unless you have at least ten thousand visitors per day.
#4 – Create an online course
Creating an online course is a great way to create passive income. Do you have technical skills in the areas of web development, graphic design, finance, entrepreneurship, health & fitness, music, personal development, and office productivity? If so, you can become an instructor by creating an online course on Udemy to help others in critical areas of their lives. There are even courses on Udemy that teaches you how to create an online course.
The best way to determine if the online course you would like to develop is a good one is to first research other popular courses on the site. Look at how many students are enrolled in the courses to gauge if the course is popular or not. Review the comments provided by students that have taken the course. Structure the curriculum for your course in a manner that includes the feedback provided by satisfied students while considering the comments of negative feedback. Don’t be in a rush to simply create a course and sacrifice quality. Remember, a good course with a relevant topic will attract hundreds if not thousands of students. Satisfied students leave positive reviews which will encourage other students to take your course. One good online course can result in years and years of potential passive income. Imagine if you had three to five online courses.
#5 – Sell Photos on Stock Photography Websites
Can you take really good pictures? Perhaps you should consider using your hobby to generate passive income. Instead of just leaving your photos on your camera or storage device, try selling your stock photography on some of the most popular sites such as Shutterstock or iStockPhoto. These are not the only ones available. There are numerous sites where you can sell your photos online.
Don’t know how to get started what you will need to make this a profitable venture? Take a course on Udemy to learn everything you will need. What is the best camera to purchase? What are the best editing programs like Photoshop?
Once you have are good at it and are making money selling your photos online, you could create your own course on Udemy teaching others how to take amazing photos and make money too.
#6 – Build a Fulfillment by Amazon Business
Fulfillment By Amazon (FBA) is another Amazon vehicle that can help you earn passive income. With so many products and income channels, it’s no wonder that Jeff Bezos is the now the richest man in the world.
An FBA business gives you access to the entire Amazon marketplace and allows you to drop-ship items directly through the world’s largest retailer. However, FBA requires more work than the other passive income strategies listed in this post so you may not consider FBA 100% passive.
The FBA process works like this.
You find a hot selling item that you can source through one the many wholesale sites like Alibaba and white label the item with your own branding, or you can go directly to manufacturers to source the product through them.
Once you have been approved and created your sales page on Amazon, you can sit back and wait for sales to start rolling in. With FBA, you don’t have to worry about storing the product in your home, taking orders, or shipping the product to customers. All you need to do is get your products to Amazon. They take care of most of the hard work for you. However, this is still a business. It does not run totally on autopilot. It does involve a bit more time to manage this process to make sure everything runs smoothly. Nevertheless, FBA is another great way to earn money without leaving your home.
#7 – Create Printable On-Demand Merchandise
Are you creative and have an eye for what kinds of design will sell? If you do, consider creating your own printable on-demand merchandise that you can sell online. Just like with FBA, you won’t have to stock or warehouse the merchandise yourself. There are several websites to assist you in building a complete store of printable on-demand products that you can market across a variety of channels.
For example, there is CafePress where you can sell anything from mugs and ceramics, home decor, t-shirts and clothing, to even prints and cards. Simply create an eye-catching design and market it to the right people.
Another site similar to CafePress is Zazzle. On Zazzle, you can sell merchandise without dealing with the hassle of fulfilling orders or dealing with customer service issues. All you have to do is focus on being creative and, of course, driving traffic to get more sales.
With either CafePress or Zazzle, along with numerous other sites like these two, you will also receive promotional tools and the ability to ship products worldwide without ever actually having to physically make or store the product yourself. This is a low-cost and great way to generate passive income without the headaches that can come with running an online store.
#8 – Sell Digital-Only Products
Another way to generate passive income online is to create digital-only products through Etsy, which is one of the largest resources for selling arts, crafts, and other collectibles online. Any type of digital product can be sold on Etsy. The process doesn’t involve shipping any products. Customers simply purchase, download and print at their leisure.
#9 – Get involved in Affiliate Marketing
I’m not talking about network marketing or a pyramid scheme. While these have indeed made many people a lot of money, these types of passive income streams are not for me. I’m talking about affiliate marketing of products and services you stand behind and believe in because they add value to people’s lives. People are actually looking for the products, they aren’t being pitched something they need to be convinced to purchase.
Affiliate marketing probably won’t make you a lot of money. You won’t get rich this way like you can if an app you make goes viral. But, affiliate marketing, if done the right way by truly understanding SEO, can draw an audience of willing customers that will create a residual, passive income stream by coming back to purchase your product over and over again.
#10 – Build an App for iTunes or Android
It seems everyone is building an app these days. Competition in this space is extremely high. However, that does not mean you should ignore or rule out creating an app. All apps are not created equally and there is plenty of room for great apps that can solve real-world problems and make life easier. Make sure you create an app of good quality, that’s easy to use and provides real value such as entertainment or informational value to consumers.
If you have never built an app before, there are plenty of developers that can help you learn how to create an app. There are lots of courses on Udemy that can teach you the required steps from signing up for an iTunes Connect Account, which will allow you to publish your apps on the iTunes store, to creating an app for Android devices that are available on the Google Play store.
If your app is as successful as Angry Birds you will never have to worry about money again.
So, there you have it – 10 passive income ideas that require very little startup capital. While some of these ideas may not be entirely passive, the time commitment required is not as long as active income pursuits such as your 9-to-5 job. The truth is, there are very few fully-passive ideas for generating income. But that does not mean you shouldn’t try one or two of these ideas to develop multiple steams of income.